Sprint Financing an Issue in Dish’s Clearwire Bid

Senior Editor

Dish Network Corp.’s unsolicited bid for Clearwire Corp. includes a provision that says the offer will be withdrawn if Clearwire taps a financing package offered by Sprint Nextel Corp. that came as part of Sprint’s takeover offer for the wireless broadband provider. Already, Clearwire has revoked a draw notice on the financing, but Sprint is disputing its ability to back away, according to a regulatory filing.

Comments (2 of 2)

The best idea put forward was suggested in the Deal Journal article “Five Questions Raised by Dish’s Bid for Clearwire”.

Softbank and Sprint will both have to give a little to make a deal happen. For example Softbank gets 51% of Sprint and Sprints new shares are worth $5.50 rather than $6.50. Or a more simple transaction that Clearwire minority holders would probably jump at is the #2.97 cash offer plus one share of the “New Sprint”. It is doable if Softbank wants a deal without going back to its lenders,

I'm not sure DISH could match such an offer.

5:24 pm January 10, 2013

CFA wrote:

Everything sprint has done for the past few years has been designed soley to acquire clearwire shares very cheaply and screw clearwire's minority shareholders.

The $1.50 buyback provision for drawdown promisory notes doesn't surprise me one bit... it's part and parcel to why clearwire's minority shareholders hate Dan Hesse so vehemently and would support an alternative to his ridiculous $2.97 bid even if it were offered by Homer Simpson.

Simply put, nobody can buy all of clearwire without going through Sprint... and Sprint can't buy all of clearwire without > 50% of the vote of minority shareholders, which it didn't have before the dish offer... and certainly won't have as a result of the dish offer.

The stalemate means a deal must be made. The best outcome would be for Softbank to still get a good deal... but for clearwire's minority shareholders to get a "poor" deal instead of the "ridiculous" deal that's currently on the table. $4.50 a share would probably settle this thing.

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